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Summary:

What are the odds that two companies with sound-alike names would launch on the same day? Maybe not so bad in today’s startup world when everyone is chasing the same trends. Be it a mistake or the zeitgeist, Locu and Loku have a problem.

loku-locu-feature

Updated: Locu launched Wednesday morning with $600,000 in funding to help small businesses put their data online so people can search for local information. A few hours later, newly rebranded Loku pitched at the Capital Factory Demo Day in Austin, Texas helping people discover local businesses based on what others say about them. Are the confusingly similar names bad luck, or a lesson for entrepreneurs everywhere?

If you guessed lesson, you win, because indeed, the Austin-based Loku-with-a-k guys had their chance to buy the Locu.com (with a c) domain name, but deemed it too expensive, says Eric Sung, VP of operations at Loku-with-a-k. Ironically, the company had rebranded itself last month, changing its name from Borrowed Sugar. That’s when it made the fateful decision to avoid snagging the Locu-with-a-c domain.

Both companies are playing up two hot trends in the startup world — location and big data — so their pitches sound familiar. Locu-with-a-c plans to work with small businesses, while Loku-with-a-k is more of a consumer play. However, aside from costly domain mistakes, there’s another lesson here in the current market of fast-following, me-too companies. Sometimes it pays to spend on branding and think beyond the tired naming traditions, such as using variations of local for your local-based startup. I’m not sure if Echoecho is much better, for example, but at least EkoEko hasn’t popped up yet, and if it does, it’s less likely to play in the same market. For now, let the best Loku/Locu win.

Update: Turns out the two companies picked up the phone to see if they could work together after this story came out. The founders emailed me the following statement:

… Locu is creating the world’s largest semantically-annotated repository of real-time small-business data, serving both API partners and local businesses. Loku is serving consumers, using the power of Big Data to make it easy for people to connect locally. Are we worried that people will confuse us? No. At the end of the day, we are really different companies going after different markets. In fact, we might end up working together at some point as partners. In the meantime, check out both Loku and Locu – we’re rooting for each other, and hope you do the same. For those of you that expected a startup battle – sorry that we disappointed you. The only four letter words exchanged were, well, Locu and Loku. May we both win!

  1. This is such a great point. Naming and brand image is something we learned firsthand. Before rebranding to FeeFighters, our company was called TransFS and it was terrible. No one could remember the name and it didnt mean anything. You can learn more about our rebranding through this Mixergy interview. http://mixergy.com/sean-harper-feefighters-intervie/

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  2. That’s unfortunate that they go for the domain.

    I was reminded of how confusing related names can be when I was looking for, uh, ShareSpace, SquareShare, or was it, SquareSpace? I can never remember!

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  3. Oops, I meant that they DIDN’T go for the domain.

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  4. I saw Loku pitch a few weeks ago at 500Startups and they’ve got my vote hands down. From a vc’s point of view, this is genius free press.

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  5. This article touches on a great topic. With so many businesses thriving from internet commerce it is paramount to protect your company’s online identity. As a domain investor, I am personally baffled by the fact that a lot of businesses wouldnt choose to invest their money to purchase a reasonably priced domain name that is very closely related to, or in some cases, directly represents the name of their company. I have attempted to sell HealthyBlends.com, PrestigeLaboratory.com, PrestigeBiomedical.com, and PrestigeDiagnostics.com at extremely reasonable prices to companies operating under those exact names (google these terms and see what I mean!)and I didn’t see much interest on their part. They assume that their second-rate dot net domain or county-specific ccTLD will suffice. This is a very small cost to invest in the marketing and branding of their companies. I would think that business owners would be a little more intelligent. Some of then must be Loco!

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